Taxing thoughts

The modern twist on the ancient aphorism might be, "April taxation brings May vexation."

There's precious little rest for the weary taxpayer, who on average just achieved Tax Freedom in Arkansas--the date up to which every penny of earnings is used to pay various local, state and federal taxes--on April 14.

That's 10 days ahead of the U.S. average but still later in the calendar than the last couple of years.

Here in the season of fragrant scents, the fact that the average taxpayer has just started putting money in his or her own pocket last week is a stinker.

The Tax Foundation publishes pertinent state tax data every year, and a more telling statistic for Arkansas is our combined state and local tax burden relative to other states.

The report covers 1977 to 2011, and it's interesting that prior to 2000, Arkansas never ranked higher than 30th in the country as burdensome from a tax standpoint.

Conversely, since 2005, our state has never ranked lower than 18th. In the last fiscal year reported, 2011, we ranked 12th--the highest ever.

In 1977, Arkansas average per capita income was 75 percent of the U.S. average figure. By 2011 the state's income had grown ever-so-slightly against the national average by 4 percent.

But state and local taxation during the same period increased at a rate nearly six times as fast, by 23 percent.

A little analysis of our tax mix clarifies things a bit.

Across the country, only six states get a larger percentage of their total state and local tax collections from general sales tax than Arkansas, which relies on sales tax for 36 percent of our tax revenue.

Only six states get a smaller percentage of collections from property tax than Arkansas, which derives 18.8 percent of tax revenue from that source.

Who knew that Arkansas is second in the nation in combined state and local sales tax rates? The sole state that taxes sales purchases higher is Tennessee, which doesn't have a state income tax on wages (only on interest and dividend income).

Ranked at number 25 for state income-tax collections per capita, Arkansas lands disproportionately higher than our 42nd per capita income ranking.

We have lower incomes than all but eight other states, and yet pay more state income tax per capita than 25 other states do.

Part of the reason for that disparity is that Arkansas approaches taxation on property much more favorably. Our combined state and local property taxes per capita rank 48th among states. Only Oklahoma and Alabama are friendlier to property owners.

Times change but taxation often remains frozen in bygone eras. Low property taxes in agricultural states might serve to spur economic development for family farms, but is less applicable with today's increasingly corporatized farming model.

We distinguish between corporate and individual income-tax rates; perhaps it's time to consider the same distinction on property.

Sales taxes in general are considered regressive, particularly without full exemptions for groceries. In a bottom-quintile per capita income state, it would be far from ideal to draw up a taxation strategy that counts most heavily on what people buy with their money.

National tax reform is unlikely to generate much besides rhetoric. Rethinking and retooling our state tax structure--and adjusting our tax-collection sources to bring better balance with income and population rankings--is more realistic, and beneficial.

Mosquito money

The city of Walnut Ridge recently approved $80,000 for mosquito control, and it reminded me of the massive quality-of-life issue the Delta area faces because of the pests.

In rice-producing counties especially, the sheer volume of biting insects renders nighttime outdoor activity nearly impossible. Looked upon as an economic development issue (which it rightly is), the state could develop a matching fund program for communities battling mosquitoes.

The matching money could either go to direct-control programs like spraying, or be used to take preventive action against larva in rice fields.

The bottom line is that mosquito epidemics, which also create health risks, should be a vestige of the past now that there is ample and safe technology to eliminate them.

Cappies argument

Once again, I was treated to an astonishingly impressive performance from the theater program at Jonesboro High School with its recent production of The Pajama Game.

The Doris Day movie might be more memorable to many than the Broadway musical, although the latter won a Tony in 1955, and its revival won another in 2006, for a uniquely American management-labor love story and some really fun songs and stage choreography.

The talent of the cast, crew and orchestra members demonstrated once again that Arkansas needs a Cappies program not only to recognize student achievement statewide with awards, but also afford the opportunity for advancement like sports teams have.

Arkansas schools continue to repeatedly show the caliber of theatrical artistry that deserves to perform at the Kennedy Center, where the annual national Cappies gala is held.

It's time our theater students get that chance.

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Dana Kelley is a freelance writer from Jonesboro.

Editorial on 04/24/2015

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